Hindustan Unilever

The company's performance was on expectation of line. The net sales increased by 8% to Rs 4876.21 crore including the other operating income of Rs 82.32 crore. Other operational income includes charge of Rs 13.22 crore on account of foreign exchange Mark to Market (MTM) valuation of open forward contracts & monetary items. Domestic Consumer Business growing 8% driven by sustained double digit volume growth of 11%. Both Detergents & Personal Products grew double digit in volume. HPC business grew 5%. Personal Products grew 11%, with volumes also growing in double digits. Foods business including Beverages grew 13%.

OPM declined by 192 basis points to 14% due to rise in ASP cost and cost of purchased goods. As a result, Profit before tax before exceptional item declined by 4% to Rs 669.49 crore.

Harish Manwani, Chairman commented:

Despite an intensely competitive environment, we have sustained double-digit volume growth. We continue to invest fully to defend our strong leadership positions and build competitive growth momentum through bigger and better innovations. We are simultaneously leading market development of emerging categories and strengthening organizational capabilities to win with consumers, channels and segments of the future.

For quarter ended June 2010

The net sales has increased by 8% to Rs 4876.21 crore including the other operating income of Rs 82.32 crore. Other operational income includes charge of Rs 13.22 crore on account of foreign exchange Mark to Market (MTM) valuation of open forward contracts & monetary items. Domestic Consumer Business growing 8% driven by sustained double digit volume growth of 11%.

Both Detergents & Personal Products grew double digit in volume. HPC business grew 5%. Decisive actions to defend the market leadership were implemented, delivering accelerated volume growth, especially in Laundry. All three brands in Laundry grew well. Rin was relaunched with an improved formulation towards the end of the quarter. Personal Wash regained volume momentum, post portfolio rejuvenation and continued brand support. Premium soaps portfolio grew strong double digits. Dove became accessible to more consumers with the launch of Rs 20 price point pack.

Personal Products grew 11%, with volumes also growing in double digits. In Shampoo, leadership was further strengthened with growth ahead of the market. Conditioners portfolio continues to be built with great success. In Oral, the germicheck credentials of Pepsodent were strengthened with a new communication, while Close up continued to perform well. Skin Care growth was broad based and well ahead of market, driven by the relaunch of Fair & Lovely and growing contribution from Pond's White Beauty & Vaseline Healthy White. The male grooming portfolio continued to be strengthened with the launch of Vaseline Menz and Max Fairness under Fair & Lovely. The expanded facial cleansing portfolio performed very well.

Foods business including Beverages grew 13%. All segments in Foods viz Tea, Coffee, Processed Foods and Ice creams grew well. With the successful launch and national roll out of Brooke Bond Sehatmand, Tea grew in double digits despite a weak market growth. Knorr Soupy Noodles received a very good consumer response with volume above expectations. Kissan and Annapurna brands grew in strong double digits with robust volume growth. Ice-cream grew 18%, crossing the Rs 100 crore milestone during the quarter.

Pure-it continued its strong growth momentum, boosted by a successful launch of Pure-it Compact at Rs 1000, which maintains the highest standards of germ kill efficacy. The business expanded its retail coverage and further enhanced service levels.

OPM declined by 192 basis points to 14% due to rise in ASP cost by 260 basis points to 16% and purchased of goods by 150 basis points to 14% of adjusted net sales. New innovations, entry into new segments and competitive brand support led to A&P expenditure. As a result, operating profit declined by 5% to Rs 680.94 crore.

Other income increased by 26% to Rs 42.13 crore, which includes interest income, dividend income and net gain on sale of other non-trade investments. Interest expenses decreased by 98% to Rs 0.08 crore. Depreciation saw a rise of 26% to Rs 53.5 crore. Profit before tax before exceptional item declined by 4% to Rs 669.49 crore.

There was an exceptional income of Rs 18.50 crore, which include profit on sale of properties Rs 18.49 crore, profit on sale of long term trade investments Rs 4.41 crore and restructuring costs of Rs 4.4 crore. As a result, the profit before tax after exceptional items has declined by 2% to Rs 687.99 crore.

Tax outgo has decreased by 6% to Rs 154.78 crore. The net profit has decreased by 2% to Rs 533.21 crore due to fall in margin.

For FY10

The net sales for FY10 has increased by 6% to Rs 17725.33 crore including the other operating income of Rs 201.53 crore. Other operational income includes charge of Rs 56.33 crore on account of foreign exchange Mark to Market (MTM) valuation of open forward contracts & monetary items. Domestic Consumer business grew 8.6%.

OPM has inclined by 29 basis points to 15.5% due fall in raw material/packaging cost by 220 basis points to 37%, purchase of goods by 40 basis points to 13%, staff cost by 30 basis points to 5% and other expenditure by 110 basis points to 16% of adjusted net sales. However, there was rise in advertising & promotion (A&P) cost by 350 basis points to 13% of adjusted net sales. As a result, operating profit has inclined by 8% to Rs 2749.97 crore.

Other income declined by 19% to Rs 148.11 crore. Interest cost has decreased by 68% to Rs 6.98 crore while depreciation inclined by 16% to Rs 184.03 crore. Profit before tax before exceptional items increased by 6% to Rs 2707.07 crore.

Exceptional items income stood at Rs 55.45 crore. As a result, the profit after tax after exceptional item increased by 9% to Rs 2762.52 crore. Total tax paid has increased by 49% to Rs 616.37 crore. There was an EO income (net of taxes) of Rs 55.88 crore. The net profit inclined by 4% to Rs 2202.03 crore due to EO income.

Soaps & detergents

The revenue has increased by 2% to Rs 2264.46 crore due to cut in prices on back of pricing competitative pressure. PBIT margins had declined by 630 basis points to 11%. As a result, PBIT had decreased by 35% to Rs 248.75 crore. The category contributed around 47% to the revenues while the contribution to PBIT stood at 37%.

The revenues for FY10 grew by 1% to Rs 8265.64 crore. PBIT margins had declined by 99 basis points to 14.3%. As a result, PBIT had decreased by 5% to Rs 1185.27 crore. The category contributed around 49% to the revenues while the contribution to PBIT stood at 42%.

Personal care

The revenues grew 11% to Rs 1365.51 crore. PBIT margin have increased by 280 basis points to 24.8%. As a result, there was increase in PBIT by 26% to Rs 338.79 crore. The category contributed around 28% to the revenues while the contribution to PBIT stood at 50%.

The revenues grew 16% to Rs 5047.9 crore for FY10. PBIT margin have decreased by 140 basis points to 25.7%. Despite it, there was increase in PBIT by 10% to Rs 1296.52 crore. The category contributed around 26% to the revenues while the contribution to PBIT stood at 46%.

Beverages

The sales grew by 8% to Rs 537.84 crore. The segment contributed 11% to the total revenues. PBIT margin has declined by 120 basis points to 12.9%. Despite it, PBIT decreased by 1% to Rs 69.53 crore. It contributes 10% to the total PBIT.

The sales for FY10 grew by 15% to Rs 2142.43 crore. The segment contributed 11% to the total revenues. PBIT margin has inclined by 130 basis points to 14.9%. As a result, PBIT increased by 26% to Rs 319.75 crore. It contributes 11% to the total PBIT.

Processed Foods

The sales have increased by 23% to Rs 211.11 crore. PBIT margin turn positive to 5% as a result, there was PBIT of Rs 10.55 crore.

The sales grew by 11% to Rs 730.78 crore for the FY10. PBIT margin turn positive to 0.6% as a result, there was PBIT of Rs 4.44 crore.

Ice-creams

The sales grew by 18% to Rs 104.64 crore. PBIT margin declined by 280 basis points to 14.6%, as a result there was PBIT fall by 1% to Rs 15.32 crore.

The sales grew by 16% to Rs 231 crore for FY10. PBIT margin is declined by 10 basis points to 5.5%, despite it the PBIT has increased by 14% to Rs 12.69 crore.

Export revenues

The export revenues increased by 3% to Rs 264.77 crore. Margin has inclined by 60 basis points to 8.6%. As a result, there was a incline in PBIT by 10% to Rs 22.69 crore. The category contributed around 5% to the revenues while the contribution to PBIT stood at 3%.

The export revenues decreased by 15% to Rs 1005.25 crore for the FY10. Margin declined by 190 basis points to 5.8%. As a result, there was a decline in PBIT by 35% to Rs 58.58 crore. The category contributed around 7% to the revenues while the contribution to PBIT stood at 2%.

Valuation

The Board of Directors in their meeting held on 11th June 2010 approved buyback of Company's equity shares at a price not exceeding Rs. 280 per share and upto an aggregate amount of Rs 630 crore.

The scrip was trading at Rs 260.3 on 27^th July 2010 on BSE.

Promoters of the company hold 52.01% stake in the company.

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